Pfizer (PFE) 10-K 2016 FY Annual report

EXHIBIT 12

Pfizer Inc. and Subsidiary Companies

Computation of Ratio of Earnings to Fixed Charges

	Year Ended December 31,
(MILLIONS OF DOLLARS, EXCEPT RATIOS)	2016			2015			2014			2013			2012
Determination of earnings:
Income from continuing operations before provision for taxes on income, noncontrolling interests and cumulative effect of a change in accounting principles	$	8,351		$	8,965		$	12,240		$	15,716		$	11,242
Less:
Noncontrolling interests	44			39			47			43			47
Income attributable to Pfizer Inc.	8,307			8,925			12,192			15,673			11,195
Add (deduct):
Capitalized interest	(61		)	(32		)	(41		)	(32		)	(41		)
Amortization of capitalized interest	59			25			31			34			36
Equity (income)/loss from equity-method investments	(49		)	191			(24		)	(67		)	(105		)
Distributed income of equity method investments	119			161			136			162			85
Fixed charges	1,285			1,282			1,435			1,495			1,627
Total earnings as defined	$	9,661		$	10,554		$	13,729		$	17,265		$	12,796
Fixed charges:
Interest expense(a)	$	1,186		$	1,199		$	1,360		$	1,414		$	1,522
Preferred stock dividends(b)	2			2			3			3			4
Rents(c)	97			81			72			78			101
Fixed charges	1,285			1,282			1,435			1,495			1,627
Capitalized interest	61			32			41			32			41
Total fixed charges	$	1,346		$	1,314		$	1,476		$	1,527		$	1,668
Ratio of earnings to fixed charges	7.2			8.0			9.3			11.3			7.7
(a)Interest expense includes amortization of debt premium, discount and other debt costs. Interest expense does not include interest related to tax matters (primarily uncertain tax positions) of $242 million for 2016; $246 million for 2015; $182 million for 2014; $222 million for 2013; and $265 million for 2012.
(b)Preferred stock dividends related to our Series A convertible perpetual preferred stock held by an employee stock ownership plan trust.
(c)    Rents included in the computation consist of one-third of rental expense, which we believe to be a conservative estimate of an interest factor in our leases, which are not material.
Amounts may not add due to rounding. Percentages have been calculated using unrounded amounts.